Natural Resources Committee: Inquiry into Unconventional Gas (Fracking) in the South East of South Australia

The Hon. J.S.L. DAWKINS ( 16:45 ): I move: 

That the 119 th report of the committee be noted. 

The Natural Resources Committee's Inquiry into Unconventional Gas (Fracking) in the South East of South Australia was referred by the Legislative Council to the committee on 19 November 2014 on the motion of the Hon. Mark Parnell MLC, as amended by the Hon. Tammy Franks MLC. I interpose to say that most of us in this place remember the things that led up to that in great detail, but I was certainly one who was keen that this matter be examined by a parliamentary committee. I was keen that it be the one of which I happened to be a member. It has been a two-year process, and I hope that members get a chance to have a look at what is a very substantial report. 

Pursuant to section 16(1)(a) of the Parliamentary Committees Act 1991, the committee has inquired into the potential risks and impacts in the use of hydraulic fracture stimulation (fracking) to produce gas in the South-East of South Australia and, in particular: one, the risks of groundwater contamination; two, the impacts on landscape; three, the effectiveness of existing legislation and regulation, and; four, the potential net economic outcomes to the region and the rest of the state. 

After the public call for submissions, the committee received 178 written responses and heard from 66 witnesses. The committee took evidence from Santos, Beach Energy, Cooper Energy, Halliburton, the Department of State Development (DSD), the South Australian Chamber of Mines and Energy (SACOME), petroleum industry peak body APPEA, many business people and residents from the South-East of South Australia, and a wide range of witnesses from across the rest of Australia and overseas, including the Hon. Thomas George, Deputy Speaker in the New South Wales parliament and member for Lismore. 

The inquiry, one of many conducted on this subject by Australian parliaments in recent years, has attracted a high level of community interest, as the numbers I have just read out would indicate. The interest remained highest throughout the inquiry, with frequent contacts to the committee via email, telephone and even through the post, I think which surprised the staff that people still write letters. These came from members of the public, community groups and industry. 

The committee undertook four fact-finding visits, comprising two trips to the South-East, one visit to Queensland and one to the Moomba gas fields in the Cooper Basin. The South-East visits allowed the committee to take evidence from local residents and businesses, and to visit the gas industry sites. The committee planned a third visit to the South-East, intending to hold hearings in Mount Gambier, but as no new witnesses wished to give evidence this visit did not proceed. 

The extended visit to Queensland included the towns of Roma, Chinchilla, Dalby and Miles, as members sought to gain an appreciation of how the unconventional gas industry and agriculture might coexist and what community impacts might be expected. The Moomba visit was undertaken by some members of the committee who had not previously been to that region in order to view an unconventional gas well in development. An interim report entitled Inquiry into Unconventional Gas (Fracking) Interim Report was brought down just over 12 months ago on 17 November 2015. 

I provide a list of a few energy-related events which have occurred in the time since that interim report was brought down: the Leigh Creek coalmine closure in November 2015; the doubling of domestic gas prices since the completion of gas hubs at Gladstone linking Australia to world market prices; the closure of the Port Augusta coal-fired power station in May; the announcement by BP on 10 October this year that it was withdrawing its plans for exploration and drilling in the Great Australian Bight; and global renewable energy capacity overtaking coal on 25 October 2016; also, very notably, the banning of onshore unconventional gas development in Victoria in October; the new Northern Territory Labor government's decision to ban fracking throughout the Territory; the South Australian statewide power blackout in September this year; and the announcement of the closure in March 2017 of the Hazelwood coal-fired power station in Victoria.

All of this, and some other events in the 12 months while we have been dealing with the inquiry, helps to give a sense of context in which the inquiry has been conducted. What the committee has repeatedly come back to is the community at the centre of this inquiry and thus to the question of social licence, namely, does the social licence to operate exist which would allow the development of an unconventional gas industry in the South-East of South Australia? Social licence was invoked in many submissions to the inquiry and by a number of witnesses appearing before the committee. The member for Mount Gambier in another place, Mr Troy Bell, summed up social licence in his evidence to the committee, and I quote: 

The term 'social licence', or 'social licence to operate', generally refers to a local communit y's acceptance or approval of a project or a company's ongoing presence. It is usually informal and intangible, and is granted by a community based on the opinions and views of stakeholders , including local populations , Aboriginal groups, and other interested parties. Due to this intangibility, it can be difficult to determine when social licence has been achieved for a project. Social licence may manifest in a variety of ways, ranging from absence of opposition to vocal support or even advocacy, and these various levels of social licence (as well as, of course, the absence of social licence) may occur at the same time among different interested parties. 

Under this definition, social licence is given by the local community and other stakeholders when a project has broad ongoing social acceptance. Without proper community engagement, industry may find obtaining social licence more difficult than obtaining legal approvals. 

After considering all the evidence available to it, particularly the definition of 'social licence' provided by the member for Mount Gambier, the committee reached the position that social licence does not yet exist for the development of an unconventional gas industry in the South-East of South Australia. This was made starkly apparent by the widespread opposition that we witnessed from the local community. We noted opposition, in spite of there having been a pre-existing conventional gas industry in the South-East for many years, which had undoubtedly provided significant benefits for the community, including employment.

The vast majority of the submissions and representations the committee received were anti-fracking in the South-East. Essentially, the only submissions in favour of unconventional gas development were from companies and organisations engaged by, or heavily involved in, the oil and gas industry. None of the pro-fracking representations, written or verbal, came from representatives of the South-East or residents of that region. 

The committee made an effort to understand, from the perspective of local people and businesses, what the economic benefits may be, but despite repeated invitations and approaches to bodies we felt might represent this aspect of the debate, there were no witnesses forthcoming. The committee was surprised that no regional residents or businesses approached us, even in confidence, to express support for the development of an unconventional gas industry in the region. 

At the beginning of this inquiry, the committee initially saw its task as recommending whether fracking should be allowed or not, but after two years, the Natural Resources Committee resolved that ultimate responsibility rests not with the committee but with industry, government and the community to decide in partnership. 

There is no doubt that if a social licence was to be developed for fracking in the South-East then government, industry and the local community would have to work together to develop that, and that would have to be in stark contrast to the manner in which the proponent, Beach Energy, dealt with the community in the first instance. If that engagement—if you want to call it that—had been much better, then we may not have had this inquiry. There is no doubt that the proponent's activities in the South-East, certainly in the lead-up to a state election, was the worst case example you could give to anybody about how not to engage with the community. However, this inquiry has provided a forum for discussion and the committee has encouraged all stakeholders to have their say. 

I commend the report. A couple of members of parliament have looked at it so far and say that it is a significant report. We have covered many of the issues relevant to the South-East, but also relevant to the unconventional gas industry broadly, so I commend the report to members. 

I would particularly like to thank all of those who gave their time to assist the committee with the endeavour that we have undertaken in this inquiry. I thank the presiding member, the Hon. Steph Key, for her ongoing leadership and chairmanship ability, which makes the committee a very good, multipartisan committee. I also thank Mr Jon Gee and Mr Peter Treloar from the other place, the Hon. Robert Brokenshire, the Hon. Gerry Kandelaars, and former committee members, Ms Annabel Digance (who replaced Mr Chris Picton) and Mr Chris Picton for their contributions to this inquiry. 

I must say that all members have worked cooperatively on this report. It is a pity that over a number of months the government has failed to replace a member to that position, which has been filled by Mr Picton and then Ms Digance. I am sorry that some members of the Labor Party do not see that as an important position to fill. 

I would also like to extend thanks to the members from the lower house, Mr Troy Bell, Mr Mitch Williams and Mr Adrian Pederick for the evidence that they gave to our committee and for their general assistance, along with the Hon. Mark Parnell, who took great interest in the work of our inquiry, and also the other members mentioned attended some of the hearings that were held in the regional areas. 

In conclusion, I thank our staff: the research officer, Barbara Coddington and the committee secretary and executive officer, Mr Patrick Dupont for their work on the development of what I regard as a very good report, and I commend the report to the house.